are to be derived from the energy of private capital. And although only one municipa lity-viz., that of Greenock-has appeared as a Promoter this Session, yet in several of the Bills for Tramways in large provincial towns-viz., Liverpool, Dublin, Edinburgh, and Glasgow,-provisions have been introduced, at the instance of the Local Authorities, enabling them either to elect to undertake the work themselves within a period of six months, or to purchase it at an earlier period than the twenty-one years fixed by the General Act. Companies. If there is one species of un- | later, become the owners of all city tramdertaking, which a Municipal Authority Municipal Authority ways, without forfeiting the benefits which ought to undertake, it is this. It is, and must be, a complete monopoly, as the streets which can admit tramways are limited. Tramways occupy and disturb the Roadwhich is in the hands of the Municipal Authority. They need strict Police regulation, and ought to be under the complete control of those who manage the Police. Finally, they require little capital, and promise to be very profitable, so that they might in this way relieve the over-burthened rates, without requiring large original expenditure. But such is the sluggishness of governing bodies, as compared with capital seeking investment, that of forty-six applications for power to make tramways, which have been made within the last three years, all but one have been made by private Companies, and one only by a Municipal Authority. This is the more remarkable, since Parliament in the 'General Tramways Act,'* passed in 1870, expressly gave to the Municipal Authorities facilities for constructing tramways themselves, in priority to companies, and for charging the expenses on rates; whilst it also made the action of Tramway Companies dependent on the consent of the Municipal Authorities. As regards the regulations imposed on tramway Companies, experience is yet too short to speak with any confidence. But an attempt was made by the Tramways Act, 1870, so to limit these concessions, as to give the public the ultimate benefit of any profit to arise from the undertaking, and in the meantime to subject them to efficient control. In the first place, as above noticed, the concession is not to be made to a Company if the Municipal Authority chooses to undertake the work; and then only with the consent of the Municipal Authority, and under such conditions as it may impose. When the tramway is opened, if it is not so worked as to give the public the full benefit of it, licences to use it on payment of certain tolls may be granted to other persons by the Board of Trade. When the promoting Company have had the use of the tramway for twenty-one years, the Municipal Authority may purchase it at the then actual value of the work itself, without any payment in respect of profits or compensation for compulsory sale, such value to be fixed by a Government Referee. It is to be hoped that, under these conditions, the Municipal bodies may, sooner or *33 & 34 Vict. c. 78. The action of Parliament in the matter of London Tramways, singularly capricious as it has been, is, we will hope and believe, an illustration of the tendency to commit these enterprises to Municipal bodies. Having, with the aid of two laborious Select Committees, passed a General Act in 1870, enabling Tramways to be made under Provi sional Orders, sanctioned and revised, in the first instance, by the Municipal Authorities, and then brought before Parliament by the Board of Trade, the House of Commons Irave, in 1870, rejected schemes for tramways in the West end of London which have been carefully revised and fully sanctioned by the Municipal Authorities, whilst they have, at the same time, approved schemes for the East end of London which, though they had on the whole been approved by the Municipal Authorities, had not passed the ordeal of the Board of Trade. Both sets of schemes were referred to and passed by a Select Committee of the House itself; and the only difference between them, except locality, is that the schemes rejected by the House were introduced as Provisional Orders by the Board of Trade, whilst those approved by the House were introduced in the form of a bill by the Companies. At first sight, the inference would seem to be either that honourable members care more about the streets traversed by their own carriages than about those traversed by the carts and omnibuses of the East end, or that the House was so jealous of its own jurisdiction as to disapprove merely because the Board of Trade had approved. But the more reasonable and creditable ground for this capricious action of the House is, that by the time the West end schemes (which were later in the field) had come before them, they had arrived at some sort of consciousness that these Tramway schemes ought to be in the hands of some one efficient Municipal Authority, and that no such authority is now to be found in London. 9. Gas- Works. The case of gas supply is peculiar, since gas manufacture has reach- | determined, not by the wants of the town ed a high state of development and success; so much as by the circumstances of the comand the complete effect of the attempts Par-panies; and the consequence is that there liament has made to control the monopoly is an extravagant and absurd division and is better seen than in cases where profits distribution of manufacture and supply. are still small. In many cases the dividends Amalgamation proceeds slowly, and, whilst have become so large that the public are the shareholders make their easy 10 per painfully aware of the conflict of interest cent., the battle between them and the pubbetween themselves and the shareholders; lic rages as fiercely as ever. There cannot be and, on the other hand, in certain large a doubt that the conditions by which the places, prudent Municipalities have made a Legislature has endeavoured to control this good thing for the ratepayers out of the sup- monopoly have proved a complete failure. ply of gas. There is one case-viz., Manchester-in which the gas-works have been originally established by the Municipality, and there may be others. There are many cases in which works originally established by a company have been subsequently bought by the Municipality, and these cases are on the increase; but how few they are, in comparison to the cases of Gas-works still owned by Companies, may be seen from the following figures. The total number of Gas Companies in the United Kingdom, excluding London, is 1217, with an aggregate capital of about 16,000,000l. In the metropolis there are eleven Gas-companies, with a capital of about 8,000,000l. The whole number of Gas-companies in the United Kingdom is 1228, with a capital of 24,000,000l.; besides these, there are fifty-nine public gas works in the hands of private persons; and against this enormous number of private enterprises there are seventy-five cases only in which the Municipal Authority is the owner of the gas-works. The history of gas supply is so instructive that it is worth while to give some details concerning it. When gas was first introduced the manufacture was a novelty and a risk; and even now it is an expensive thing to establish gas-works where the population is small and scattered. No Local Government Board would think of doing it. But the manufacture improves, and costs less and less in proportion to the supply as it gets larger; whilst, as population grows, there is an enormously-increased demand. Consequently, prices which are quite just when the concern begins become far too remunerative after a few years, and then begins a struggle between the consumers and the Companies. In London, an attempt was made to meet this by competition; and for some years the streets were pulled up by rival Companies endeavoring to outbid each other. This was found to be such a nuisance that London was 'districted' between the Companies by Act of Parliment, thus giving each of them a legal monopoly. The districts allotted to the several companies were Under the General Act of 1847,* there are no provisions for testing the power and quality of gas supplied to the consumer; those contained in the London Act of 1860,† have proved quite ineffectual; and it remains to be seen whether the more elaborate provisions introduced, as regards some of the London Companies, by the Act of 1868, will prove more satisfactory. This, however, is a matter in which the difficulty is of a technical rather than of a financial or economical character. A more glaring defect in the General Act is, that Gas-companies, though possessing a monopoly of the supply within their district, are not bound to supply consumers who live within it. The main, and almost the only, condition on which the Legislature has relied for preventing the public from being placed at the mercy of the gas companies is its favourite panacea of limiting profits. It is provided. by the General Act that each company is to be satisfied with a 10 per cent. dividend, besides making up past dividends to 10 per cent. and setting aside a reserve fund to sccure future dividends at the same rate; and that if any company divides more than this amount of profit, a court of justice may reduce the price of gas to such an amount as will bring down their profits to the above limit. Now, in the first place, to suppose that any court of justice can constitute itself a judge of the price which will produce a certain profit and no more, is absurd; and the more elaborate provisions of some of the recent London Gas Acts, which intrust this delicate operation to more competent hands, will probably prove a failure also. It is not likely that any Government department, or any scientific commission appointed by Government, can undertake to say to a manufacturer, 'At such and such a price you can manufacture an article which shall produce you exactly 10 per cent. dividend—no more, and no less.' To do this requires all the *10 & 11 Vict. cap. 15. +23 & 24 Vic. cap. 125. 31 & 32 Vict. cap. 125. knowledge, skill, and constant experience of | Authorities, it affords some sort of limit be the manufacturer himself; and no one but himself can tell what capital he needs, what expenses he must incur, and what economies he can practise. yond which the claims of the Companies cannot go. It would be much easier and better to make the price of gas subject to periodical revision, a thing which could generally be done by reference to price at other places under similar circumstances. But further, the principle of limitation of dividends is in itself faulty. So long as the charge is not too high, the public have no But the only true solution of the gas dif interest in the reduction of dividend. Their ficulty is to do, as has been done in several interest is in the reduction of price, which large towns where the Town Councils have is a totally different thing. If the consumer either made or purchased the gas-works. In can get his gas at 38. instead of 4s. per 1000 Manchester, where, as above stated, they cubic feet, he is not the less benefited if the have for many years owned the gas-works, shareholder at the same time gets 20 per cent. the result is, that after supplying good gas instead of 10 per cent. The fallacy lies in sup- at a cheap rate they have, and have long had, posing that what is taken from the shareholder a surplus of from 40,000l. to 50,000l. a year, necessarily goes into the pocket of the con- with which they have effected all the recent sumer. It does no such thing; it is probably numerous and expensive improvements in wasted in staff and other easy extravagances, the town, besides paying a large part of the which the Company have no motive whatever cost of their still more expensive water-works. for reducing. Indeed one of the worst conse- In the twenty years ending with 1870 they quences of the system is, that it takes away have, after paying the current expenses of from the manufacturer (who it is to be re-gas-manufacture and supply, made more than membered is a monopolist) his last and only a million of surplus profits. inducement to improvement and economy. It leads not only to extravagance in current expenses, but to an extravagant waste of capital. The shareholder having an easy and safe 10 per cent. on his original shares, is naturally anxious to invest more money on so good a security, and is only too glad if he can find an excuse for a further outlay. Parliament, it is true, gives now only 7 per cent. on fresh capital, and pretends to ascertain by investigation before a Select Committee whether more capital is wanted. This, again, is a question which neither a Committee nor a Department of Government can satisfactorily determine. No one but the manufacturer himself can say with any certainty how much capital he needs; and Parliament, pressed by the argument that, if the Company is not allowed to invest more capi- Under these circumstances it is much to tal the town will not be lighted, cannot help be desired that in all future private Gas Bills giving to a Company the power of investing conditions should be inserted similar to those large sums which might well be spared, and in the Tramways Act, providing for the purthe interest of which becomes a totally un-chase of the undertaking by the Municipality necessary charge on consumers of gas. That after a given period, upon fixed terms. unnecessary capital has been laid out in London no one who looks at the map of the districts of the Gas Companies can for a moment doubt. In fact, in this Parliamentary limitation of dividend and capital we have gone on a perfectly wrong tack and have involved ourselves in a maze of absurdities. Coupled with the statutory price of gas, it really operates as a guarantee to the Companies of an easy 10 per cent. dividend. There is at the present moment one good feature in it, and one only, viz., that in the case of purchase of the undertakings by the Municipal The 8,000,000l. which forms the capital of the London Gas Companies would produce, at the rate of 10 per cent., 800,0004 a year to the shareholders. The actual proceeds are rather less, as some of the recent capital is limited to 7 per cent., and one of the largest Companies has not for a year or two, under present exceptional and temporary circumstances, divided quite 10 per cent. If these undertakings had been in the hands of a Municipal body, 8,000,000l. would never have been spent on gas-works But whatever the sum such a body might have found it necessary to expend, it might have been borrowed at 5 per cent. or less, and some hundreds of thousands a year might have been saved to the consumers of gas or the ratepayers of London. 10. Water Supply.-In many respects this is like Gas-supply. But water differs in being even more necessary, it being more difficult to procure, and in requiring greater outlay, with less profit, as the demand increases. The supply also requires greater precautions to prevent waste-precautions which it is difficult to intrust to a private Company. Under these circumstances, recentlyestablished Water-Companies, though not unprofitable, have been less profitable than Gas Companies; and their differences with the consumer have related to deficiency and impurity in the supply rather than to price. recent investments. Probably none of them, certainly none of | ficient facility for remitting money or conthe London Companies, pay 10 per cent. on veying parcels, show that the public desire to employ its machinery for purposes extending far beyond its original design. So far as it goes, the Post-office is certainly an example to show that Government organization, on a large scale, can be efficiently conducted without waste and without jobbery; and it is further a precedent for making a productive service instrumental in supplying deficiency of general revenue. Under these circumstances, the number of municipalities which have supplied themselves with water is greater than in the case of gas. The number of Water Companies in the United Kingdom, exclusive of London, as given in the published lists, is about 120, with a capital of between 7,000,000l. and 8,000,000. In London there are eight Companies, with a capital of 4,000,000l., giving altogether about 130 Companies and 11,000,000l. of capital. On the other hand, there are as many as 101 undertakings in the hands of Municipal authorities; and these are to be found in many of the largest towns, e. g. Liverpool, Manchester, and Glasgow. The regulations to which Parliament has subjected Water Companies are almost verbatim the same as in the case of gas, with one important exception, viz., that Water Companies are bound to supply water to all consumers in the district to which their monopoly extends, upon certain fixed terms. As regards limitation of profits, the conditions are precisely the same; but their effect is not seen, because the limit has not been reached. In this case, still more than in that of of gas, it is important for the health of the people that the supply should be in the hands of a body which can have no motive for restricting it; which does not seek profit from it; which can enforce rules for preventing waste, and which can draw upon other funds, if the expense of supply is large. Facilities should be given to Municipalities for purchasing on fair terms exist ing water-works; and no new Company should obtain a Bill without provision for the purchase of the undertaking by the Local Authority. 11. Post-office.-This is the only case in which the central Government have from the commencement established and carried on the undertaking themselves. But even here there is a qualification. For shortly after the establishment of the Post-office, when it was the monopoly of the Duke of York, a private merchant, Lord Macaulay tells us, set up a London post and parcel delivery of his own, which forced the Post-office, whilst asserting their own monopoly, to establish the London twopenny post. It can scarcely be denied that the Post-office is a success. The very faults which are found with it, viz., that it does not give suf * 'Waterworks Clauses Act,' 10 & 11 Vict. c. 17. Two defects there are at present in it: First. Its subordination to the Treasury. That department, which should be as strong as possible in controlling the expenditure of other departments, ought to be confined to that function, and not to be burdened with administrative duties which are foreign to its own business, and which it cannot discharge properly. The Minister who manages the Post-office ought, instead of being merely subordinate to the Treasury, to occupy towards the Treasury a position similar to that of the Head of the Admiralty or War-office, so that the efficiency of the service may not be postponed to economy, or impaired by unnecessary control. Secondly. The Post-office arrangements and the Railway system have, as we have noticed above, never been properly adapted to each other. The interest of the Companies and that of the Post-office are not necessarily consistent, and sometimes utterly at variance with each other; and the result is, that whilst persons, goods, and telegraphic messages follow the new routes of communication, and find their centres of collection and distribution either at the Railway-station, or elsewhere, as may be most needed; letters too often go by the old roads; have to be sent for to the old Post-offices, and fail to reach their destination with the same rapidity and certainty as ordinary parcels. This evil is one for which, whilst the Railway Companies remain in their present position, it is not easy to find a remedy. 12. Telegraphs.-The manner in which these have been dealt with is a remarkable instance of the slowness of Government action. It is now generally admitted that these means of communication ought to be in the hands of the Government, but it is within the recollection of some persons still in office that, when Telegraph Companies were first beginning operations in this country, and when the Swiss and other Foreign Governments were establishing telegraphs in connection with their Post-offices, an official high in position in the department then charged with business relating to telegraphs, most strongly urged upon the Government the expediency of taking them into its own hands. This advice was rejected. Private companies established them; and the country has had to purchase them at an enormous cost. The increase of business is so large, that even after paying all interest on capital, as well as working expenses, the first year's accounts show a small surplus.* But it also appears that the Government have had to pay to the Companies four to five millions more than they would have had to pay if they had constructed the telegraphs themselves, and that they have besides, a system much inferior to that which they would have had if the Post-office had constructed it. Although it is as yet too early to speak with absolute certainty concerning the results of this purchase by the Government, there is every reason to believe that it will result in increased efficiency and economy. At any rate no one dreams of retracing the steps thus taken.* From the above short notice of these several undertakings, we may draw the following conclusions of fact: (1.) That in an earlier state of society, the undertakings of which we are speaking were generally established and maintained by some public governing body, whether of the country generally, of the districts or inte rests concerned. (2.) That at a later period private capital and enterprise came to the assistance of Government, and did what Government never could or would have done. (3.) That at a later period still, the evils arising from placing these monopolies in the hands of private companies have been felt; that these evils are likely to be felt still more strongly, and that there is a tendency again to place such companies in the hands of some public body-central or local. (4.) That whilst Harbours; natural Navigations; many Docks, Roads, and Bridges; a few Gasworks; some Waterworks; the Post-office; and Telegraphs are now in the hands of the State or of Local Governing Bodies; many Docks, all Railways, most Tramways, and most Gas and Waterworks, are in the hands of Private Companies; and further, that the Capital invested in these undertakings amounts probably to 700,000,0007. (5.) That there are many points in which the interests of thes? Companies are at variance with that of the Public; and that the conditions which Parliament has hitherto imposed on them, have proved altogether inadequate for protecting the public interest. This brings us to the last question we pro pose to consider, viz., what is the best mode of dealing with these undertakings for the future? As regards existing Companies, it is extremely difficult to state in any general terms what can be justly done; still more difficult in the present state of public feeling and of legislation to do anything effectual. Theoretically, it is quite just to make the conditions on which Parliament has made concessions to them, effectual in their operation; e. g. to compel Railway Companies to adopt a proper system of through-booking and convenient arrangements; to compel Gas Companies to supply good gas, and to use economy in its manufacture; and to compel Water Companies to give an ample supply of pure water. But there is really enormous practical difficulty in the intricate system of supervision and joint manage ment, which such restrictions imply. Take the case referred to above, of the want of harmonious arrangements between different Railway Companies, one of the greatest grievances of which the public have to complain. Suppose that a Government Department were intrusted with the duty of seeing that these arrangements were so made, as to give the greatest possible facility for through-communication to goods and passengers, and consider what powers and what an amount of interference this duty would involve. The Government officers would have to see that at each point where one railway intersects or meets another, the trains are so timed that a passenger travelling by one line shall be able, without unnecessary delay, to proceed by the other. He must, therefore, determine the time tables of both Companies. Again, he must settle how long the train of the one line is to wait for the train of. the other, if late; and he must also determine whether through-carriages must be used. He would also have to settle whether through-booking is to be adopted, and if there is any dispute between the Companies, what proportion of fares and of expenses is to fall to each Company. In short, he would be obliged, unless the Companies were to second him with a good will we have no right to expect, to take a large share of the management of their traffic arrange ments into his own hands; and a system of divided power and responsibility would be introduced, which could lead to nothing but confusion. A further practical objection to supervision of this kind, is the difficulty of procur ing the requisite powers. To any effectual measure there would be an amount of op position which no Government can or will face. A recent case in which an attempt |